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Case Study: Jollibee Foods Corporation

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CASE
Jollibee Foods Corporation
24 Leonardo R. Garcia Jr., Christopher Lovelock, and Jochen Wirtz
A Philippine fast food company has achieved market dominance in three segments in its home
country — burgers and chicken, pizzas, and Chinese food — beating out well-known international
competitors such as McDonald’s and Pizza Hut. What is the secret to its domestic success and
what are the lessons for its international ventures?
Around the world, when someone says “fast food
restaurant,” the chances are high that the first name that
comes to mind will be McDonald’s, the world’s largest
quick-service restaurant chain. In 2004, McDonald’s
held a 20% share of the US fast food market, triple that
of its nearest competitor Burger King. This was not the
case, however, in the Philippines where, for more than
two decades, fast food had been synonymous with the
name Jollibee. In the global business arena, Jollibee Foods
Corporation (JFC) was not exactly a household name.
But in its niche, the Philippines, where it controlled four
brands — Jollibee, Delifrance, Greenwich Pizza, and
Chowking — it dominated the market.
During the 1990s, JFC extended its sights overseas,
opening a small number of restaurants in several Asian
and Middle Eastern locations. The company’s chairman
and chief executive officer (CEO), Tony Tan Caktiong,
observed:
Internationalization remains a key component
of our business strategy, even as we continue to
reinforce our domestic network of stores. Our
goals of continued growth, profitability, and
market leadership, as well as our contribution to
the development of our country, may lie not just
in continuing to expand aggressively at home
but also in becoming a truly multinational
Filipino corporation.
© 2005 by Leonardo R. Garcia, Jr., Christopher H. Lovelock, and
Jochen Wirtz.
The authors gratefully acknowledge the assistance of Kristine
Abante.
This case is based on published sources, student research, and
personal experience. It was prepared solely for use as a learning
tool and is not intended to serve as an endorsement, source of
primary data, or illustration of effective or ineffective management.
Financial data in the Philippine pesos (exchange rates in mid-2004
were PHP1 = US$0.018, or US $1 = PH56).
PART 6
By September 2004, the total number of stores worldwide
in the JFC Group had grown to 1,128, of which 1,008
were located in the Philippines, and the balance in several
other countries, led by the recently acquired Yonghe
King chain in China. That year, Jollibee beat 31 other
entrepreneurs from around the world to win the 2004
World Entrepreneur of the Year award, sponsored by
Ernst and Young, one of the world’s top accounting firms.
JOLLIBEE: THE EARLY YEARS
Humble Beginnings
In 1975, Tony Tan Caktiong, a Filipino of Chinese
ancestry, and his brothers opened two ice cream parlors
in Manila’s commercial districts of Cubao and Quiapo.
These ice cream parlors were an instant hit among food-
loving Filipinos, who came to associate the stores with
special occasions such as birthdays and holidays. In
no time, the Tan brothers had decided to expand their
menu and began offering other quick meals such as hot
sandwiches, spaghetti, and burgers. After its second year
of operations, the Tan brothers noted that the store was
actually earning more from the side orders, specifically
their burgers, than from the ice cream.
Following the taste and feel of the market, the Tan
brothers decided to develop their own unique brand by
coming up with a menu that would appeal to the Filipino
palate. Jollibee was conceived as a fast food outlet of high-
quality but reasonably-priced food products tailored
especially for Filipinos, who were served by a jolly,
“busy-as-a-bee” restaurant crew. Hence the birth of the
bright red and yellow “Jolly Bee” mascot, which had since
become a favorite among Filipino children. In response
to the growing popularity of their sweet homemade
burgers — made from their mother’s secret recipe — and
the other hot meals, Tony Tan and his brothers formed
Case Studies C24.1
Jollibee Foods Corporation (JFC) in 1978 to exploit the
possibilities of a hamburger concept more fully. By that
time, the firm had seven outlets.
When McDonald’s entered the Philippine market in
1981 and began opening stores in Manila, some industry
observers questioned whether the little 11-store local
chain could survive. However, Jollibee’s management
team decided to see this as an opportunity that would
allow them to benchmark the American giant’s operations
and then bring their own chain up to world-class
standards. In particular, they focused on learning
about the sophisticated operating systems that enabled
McDonald’s to control its quality, costs, and service at the
store level — an area of weakness in the local firm that
had constrained further expansion. As Tony Tan gained
a better understanding of McDonald’s business model,
he recognized not only strengths but also specific areas of
weakness in the latter’s strategy, reflecting its standardized
product line and a US-dominated decision processes.
Capturing Filipinos’ Taste Buds
In the Philippines, people love to eat and are used to
doing so up to five times daily, enjoying snacks in between
meals and a comfortable place to chat with friends
and loved ones. As a result, the nation had become an
attractive market for global players such as McDonald’s,
KFC, Wendy’s, Burger King, and Pizza Hut. Yet, despite
growing competition, Jollibee had managed to maintain
its dominant position as the leading fast food chain in
the Philippines, with a menu tailored specifically to the
Filipinos’ preferences.
Jollibee’s keen insight and understanding of the Filipino
psyche had brought to everyone’s lips the promise of
langhap-sarap (freely translated, this means “smells good
so it must taste good”). In addition to meals with fries,
Jollibee offered rice or spaghetti with its entrees. Its moist
burger patties and spicy sauces were so distinctly Filipino
that Jollibee’s burgers were often likened to what a Filipino
mother would cook at home. This strong understanding
of Filipino’s taste and preferences set Jollibee apart from
its competitors.
Although long-time favorites like Chickenjoy, Spaghetti
Special, Jolly Hotdog, French Fries, and Yumburgers still
continued to hold their appeal, over time, Jollibee had
broadened the product range to create more excitement
and variety. The enlarged menu included more rice-based
products like Honey Beef Rice and Shanghai Rolls, a
variety of burger choices from mushroom to garlic and
cheese, a variety of chicken dishes, more flavorful desserts
C24.2 Case 24 ▪ Jollibee Foods Corporation
like the Ice Craze in buko pandan (coconut and jelly) and
mais con yelo (sweet corn) served with milk and crushed
ice, traditional Filipino breakfast rice meals, and options
such as the Tuna Pie and Pies-to-Go. Never before had
Filipinos — children, families, and adults from all walks
of life — been offered so much in a single location.
Addition of New Brands
By 1989, Jollibee had become the first Philippine fast
food chain to break the 1 billion peso sales mark. In
1993, Jollibee Foods Corporation (JFC) went public on
the Philippine Stock Exchange to broaden its capital
base, laying the groundwork for expansion both within
and beyond Philippine shores. Over the years, the size,
geographic expanse, and breadth of the company’s
operations had continued to grow. In addition to the
original chain of Jollibee burger restaurants, several new
brands had been added through acquisition.
Even as the Jollibee brand achieved market dominance,
the firm was also pursuing a strategy of diversification as a
hedge against both competition and downturns in specific
market niches. Reaching out to other segments, JFC had
acquired a portfolio of other fast food concepts, to which
it applied its carefully honed operational and marketing
skills. In 1994, it purchased Greenwich Pizza, the
Philippines’ leading pizza and pasta chain. The following
year, seeking to cater to the changing taste preferences
of the Filipinos, JFC acquired the right to operate the
Philippine’s franchise of Délifrance, an international
chain of French bakery-cafés headquartered in France.
In 2000, JFC bought Chowking Foods Corporation, the
Philippines’ top chain serving Chinese fast food.
Although Chowking had reported excellent sales and
performance since its purchase, it took time before
Greenwich Pizza was able to establish a strong position in
the market. By the end of 2003, JFC was the Philippines
market leader in three segments. In the hamburger and
chicken segment, Jollibee had 467 outlets to only 240 for
its nearest rival, McDonald’s. In Chinese fast food, there
were 245 Chowking restaurants compared to 136 for its
nearest competitor, Luk Yuen. And finally, JFC’s pizza
and pasta outlet, Greenwich, had 213 stores as compared
to 113 for its nearest rival, Pizza Hut.1 Exhibit 1 shows
trends in the number of stores by brand between the end
of 1998 and September 2004.
1 “Jollibee beats McDonald’s at its own game,” PJI Journal, www.
journal.com.ph, accessed February 17, 2021.
 PART 6
Exhibit 1 Trends in number of stores by brand, 1998–2004

Year ending December 31

Q3 2004 2003 2002 2001 2000 1999 1998
The Philippines
Jollibee 478 467 436 408 374 350 302
Greenwich 226 213 191 194 193 191 169
Chowking 276 245 216 194 164 159 142
Delifrance 28 30 28 24 13 6 4
Subtotal 1,008 955 871 832 744 712 617
International
Jollibee 23 21 21 23 22 21 n.a.
Chowking 8 9 8 7 6 6 n.a.
Tomi's Teriyaki – 3 2 1 – – n.a.
Yonghe King 89 – – – – – n.a.
Subtotal 120 33 31 31 28 27 n.a.
TOTAL 1,128 988 902 863 772 739 n.a.

Source: Fourth quarter reports, 1998–2003; 3rd quarter report, 2004.

Exhibit 2 Jollibee Foods Corporation: Selected annual financial and operational data, 1998–2003
2003 2002 2001 2000 1999 1998
Consolidated System-Wide Sales 28.9 26.8 24.1 20.3 18.1 16.7
(billion pesos)
Gross Revenues (billion pesos) 21.6 20.3 18.8 15.7 14.1 12.9
Income from Operations (billion pesos) 1.4 1.5 0.8 1.1 0.9 1.2
Net Income (billion pesos) 1.3 1.0 0.5 0.9 0.6 0.8

Source: Annual Reports, Jollibee Foods Corporation, 1998–2003.

Exhibit 3 Jollibee Food Corporation: Values, mission, and vision

Values
• Always put customer first
• Excellence through teamwork
• Spirit of family and fun
• Frugality, honesty, and integrity
• Humility to listen and learn
Mission
We bring great taste and happiness to everyone
Vision
Become the most dominant and best tasting QSR… The most endearing brand that has ever been
We will be within reach of every Filipino…
We will lead in product taste at all times
Source: www.jollibee.com.ph,
We will provide FSC excellence in every encounter… Happiness in every moment accessed February 2021.

Case Studies C24.3

By that time, Jollibee had become an international
brand that, as management declared, made Filipinos
proud. Forbes, Far Eastern Economic Review, and Asian
Business had all ranked JFC among Asia’s top companies.
It was recognized as the number one food company in
Asia by Euromoney, the best-managed company in the
Philippines by Asiamoney, and was consistently ranked
among Asia’s best employers in the Far Eastern Economic
Review’s annual survey. In 2004, JFC topped the “Asia’s
Most Admired Company” (AMAC) survey conducted
by Hong Kong-based Asian Business Magazine. Exhibit
2 shows annual financial and operational data for JFC
from 1998 to 2003. Exhibit 3 reproduces the company’s
values, vision, and mission.
Twenty-nine years after Jollibee was founded, JFC
controlled about 55% of the quick-service restaurant
market in the Philippines based on “visit shares” and
held 70% of the burger-based meals market. One million
customers ate at JFC stores daily, averaging a per capita
spending of about 40 pesos ($0.71). Each day, JFC bought
or produced 40,000 packs of chicken (with eight pieces
in each pack), 320,000 pieces of burger, and 44,250 eggs.
With more than 1,000 stores across the Philippines, JFC’s
four brands enjoyed substantial economies of scale,
gaining leverage in terms of retail site selection and
operations, procurement, manufacturing, distribution,
and marketing at levels unavailable to most industry
players. Despite a recent economic slowdown in the
Philippines and unfavorable business conditions, JFC had
continued to deliver same-store sales growth.
MARKETING, OPERATIONS, AND
HUMAN RESOURCES
Jollibee’s ‘FSC’ Commitment
The acronym FSC, described by the company on its
website as “a byword in all of Jollibee,” represented its
commitment to meeting high standards in three key
areas:
Every Food (F) item served to the public must
meet the company’s excellent standards or it
will not be served at all; the Service (S) must be
fast and courteous; and Cleanliness (C) from
sidewalk to kitchen, from uniforms to utensils,
must be maintained at all times.
The company recognized that maintaining high standards
required that employees be committed to FSC. Jollibee
C24.4 Case 24 ▪ Jollibee Foods Corporation
Foods Corporation (JFC) paid the highest compensation
and benefits package in the Philippine fast food industry.
All employees underwent comprehensive training
programs based on the underlying standards. In
addition, managers received ongoing training in the
latest operations systems and people management skills.
Opportunities existed for qualified crew members to
pursue a career path to management positions.
Marketing Strategy
Jollibee Foods Corporation’s (JFC) marketing philosophy
was based on being closer to Filipino families than its
competitors. There was wide awareness that Jollibee
was a local Filipino service business establishment that
had captured the unique Filipino taste, so it appealed
to patriotic or “pam-Pinoy” instincts. The chain also
appealed to a broad cross-section of the population
who felt comfortable and very much at home in an
environment the crew talked to them in the local
language, unlike other outlets where the crew spoke in
English and the atmosphere might be perceived by some
as projecting an elitist appeal.
The Jollibee chain had tailored its marketing strategies
to suit the Filipino culture and lifestyle. “What happens
in the normal Filipino family is that weekends are
reserved especially for children,” notes a Filipino business
analyst, “and parents try to ask their children where they
want to eat.” Jollibee appealed to children with in-store
play activities and a cast of captivating characters. Its
hamburger-headed Champ, complete with boxing gloves,
went head-to-head against McDonald’s Hamburglar.
Industry observers reported that Jollibee’s giant smiling
red and yellow bee (Exhibit 4) and a blond spaghetti-
Exhibit 4 Typical Jollibee outlet in the Philippines
 PART 6
Exhibit 5 Value proposition of Jollibee versus McDonald’s in the Philippines

Value Proposition
Jollibee McDonald’s
Target Market Families and Children Families and Children
To provide high quality food, fast and friendly To provide outstanding quality, service,
Business Operations
service in a clean and comfortable environment cleanliness, and value
Tailored to the Filipino palate. E.g., peach-mango
Menu Standardized fare. E.g., meals with fries*
pies, meals with spaghetti or rice
• Langhap Sarap Value Meals • Extra Value Meal
• Jolly Kiddie Meal (with premium items and • Happy Meal (with premium items and toys)
toys)
Promotions • Eats for Free purchase rewards program
• Bestsellers Campaign (20% discounts on
various combinations of the popular Langhap
Sarap Value Meals)
No. of Stores in the Philippines 472 241
Mode of International Expansion Franchising Franchising

*McDonald’s has since bowed to the pressure of conforming to Filipino taste preferences by introducing menu items such as McSpaghetti
and McDo, a heavily-seasoned burger.

Source: DLSU student research project, 2004.

haired girl named Hetti (a mascot for Jollibee restaurants)
were better known and loved in the Philippines than
Ronald McDonald. Jollibee endeavored to maintain its
dominance in the children’s segment by promoting its
Jolly Kiddie Meals and offering a choice of Regular Yum,
Spaghetti Special, or Chickenjoy. Having an advertising
strategy that was deeply rooted in the traditional values of
family, with a tinge of national pride, allowed Jollibee to
position itself as the destination outlet for family outings.
The De La Salle University Survey
A survey conducted by advertising management students
from De La Salle University in Manila contrasted
Jollibee’s value proposition against that of McDonald’s
operations in the Phillipines (Exhibit 5) and revealed the
main rational and emotional factors that drove Filipino
consumers’ choices in fast food restaurants.
94% mentioning this attribute, followed by accessibility/
many outlets (72%), and tastier (66%). However, only
44% of respondents cited “faster” as a desired attribute.
Emotional Attributes. For fast food in general, the three
most dominant attributes were friendly atmosphere
(76%), family-oriented or pampamilya (74%), and hang
out or tambayan (66%). The other emotional attributes
considered by respondents were mass appeal, better
environment for kids, patriotic or pam-Pinoy or lasang
Pinoy, “brings you closer to home,” “likeable Filipino
selections” or putaheng Pinoy/sangkap Pinoy, “use of
Filipino language” particularly by the service crew, and
the use of “wholesome” or “cute” endorsers (Exhibit 7).
Broadly similar ratings of these attributes were achieved
for Jollibees, although “family-oriented” was ranked first,
and “friendly” second.

Rational Attributes. Of the top 10 rational attributes Organizational Structure

underlying the selection of a fast food restaurant, the
most significant, cited by 90% of respondents, was for it
to be “affordable and/or cheap” (Exhibit 6). Next came
“faster service” (cited by 78%), followed by “accessibility”
(70%). Other attributes mentioned were “tasty,” “variety
of food,” “accommodating personnel,” “delivery services,”
“promotional items are useful,” “frequent and effective
ads,” and “offers seasonal products.” Among Jollibee’s
patrons, affordable/cheaper prices was ranked top, with
By concentrating on a country market with distinct
preferences, Jollibee had been able to tailor its menu
and marketing strategies to better reach and satisfy the
customers. While global players like McDonald’s and
KFC chose to spread their resources among their fast
food chains worldwide, for many years, Jollibee focused
its efforts only in the Philippines. During the 1980s, when
political instability hit the Philippines, McDonald’s had to
curtail its expansion process. Jollibee, on the other hand,

Case Studies C24.5

Exhibit 6 Rational attributes Filipinos look for in fast food restaurants/Jollibee
Fast Food Market Overall Jollibee
Rank Attribute % Attribute %
1 Affordable/Cheaper 90% Affordable/Cheaper 94%
2 Faster service 78% Accessibility/Many outlets 72%
3 Accessibility/“Maraming” (many) outlets 70% Tastier 66%
4 Tastier 68% Frequent and effective ads 56%
5 Variety of food chains 60% Variety of food chains 50%
6 Accommodating personnel 34% Faster service 44%
7 Delivery services 42% Promotional items are useful 40%
8 Promotional items are useful 38% Accommodating personnel 38%
9 Frequent and effective ads 34% Delivery services 38%
10 Offers seasonal products 28% Offers seasonal products 36%
Total N = 50 100% 100%

Source: DLSU student research project, 2004.

Exhibit 7 Emotional attributes Filipinos look for in fast food restaurants/Jollibee

Fast Food Market Jollibee

Rank Attribute N % Rank Attribute N %
1 Friendly atmosphere 38 76% 1 Family togetherness (“pampamilya”) 39 78%
2 Family togetherness (“pampamilya”) 37 74% 2 Friendly atmosphere 32 64%
3 Hang-out (“tambayan”) 33 66% 3 Patriotic, “pam-Pinoy,” “lasang 30 60%
Pinoy”
4 Mass appeal 27 54% 4 Mass appeal 30 60%
5 Better environment for kids 27 54% 5 Likeable Filipino selections, 28 56%
“putaheng Pinoy,” “sangkap Pinoy”
6 Patriotic (“pam-Pinoy”/”lasang 22 44% 6 Better environment for kids 28 56%
Pinoy”)
7 Brings you closer to home 17 34% 7 Use of Filipino language 20 40%
8 Likeable Filipino selections 16 32% 8 Wholesome/“cute” endorsers 13 26%
(“putaheng Pinoy”/”sangkap-Pinoy)
9 Use of Filipino language 13 26% 9 Hang-out (“tambayan”) 12 24%
10 Wholesome/”cute” endorsers 8 16% 10 Brings you closer to home 11 22%
N: 50 N: 50

Source: DLSU student research project, 2004.

C24.6 Case 24 ▪ Jollibee Foods Corporation


continued with its strategic plans of expansion. By the
time the country was back on track, Jollibee had already
gained the upper hand in terms of store locations, thus
leaving the global giant trailing behind.
The unique geographical structure of the Philippines with
its many islands made it a challenging market for fast food
companies. Among all the fast food chains competing in
the Philippines, Jollibee was the only one that operated
nationwide. In some locations, it faced no competition
from other fast food chains.
Jollibee Foods Corporation’s (JFC) strategy included
a focus on achieving operational efficiency in its
commissary and hiring the right candidates to manage its
operations and strategy planning. To meet the challenges
of a more intensely competitive market and manage
business more effectively, the company had undertaken
a major initiative in 2000 to re-align the structure of
Jollibee Philippines, decentralizing the organization
into four autonomous Regional Business Units (RBUs)
that corresponded to the country’s major geographic
markets: Mega Manila, Luzon, South Luzon, and Visayas-
Mindanao. This structure ensured a more manageable
business size and span of control. Key support functions
like human resources and administration, finance, and
network development were transferred to the RBUs for
greater efficiency in the delivery of products and services,
quicker coordination, and more timely decision-making.
The Head Office/Corporate Ser vices functions
(Marketing, Finance, Restaurant Systems, Engineering)
were re-aligned as a Support Center to provide corporate-
level direction and continuing assistance to the RBUs. Top
management believed that the new structure had resulted
in better execution of programs and renewed enthusiasm
and commitment from JFC’s managers and employees.
The continuing growth in the number of Jollibee,
Chowking, and Greenwich restaurants obscured the fact
that each year, some stores were closed, either because
they were underperforming or because they were being
replaced by newer and larger stores in a better location.
Over time, a higher percentage of stores were being
operated by franchisees instead of company-owned
(Exhibits 8A and 8B).
INTERNATIONAL OPERATIONS
Building on its success in the Philippines, Jollibee turned
its sights overseas. Initially, the company focused on
reaching communities with a large Filipino population to
PART 6
capitalize on its brand awareness, targeting markets where
there were substantial numbers of “OFWs” (Overseas
Filipino Workers). By the early 1990s, Jollibee restaurants
were operating in Hong Kong, Brunei, Saipan and
Guam (both islands in the Pacific Northwest), Vietnam,
Indonesia, Dubai, and Kuwait.
In 1998, the firm entered one of the most demanding
fast food markets in the world, the US, which had at the
time an estimated 2 million Filipino immigrants. But
aside from Jollibee’s popularity among Filipinos, the
brand also sought to appeal to other ethnic groups in its
US outlets. Other immigrants from Asia came with their
families in tow to eat at Jollibee’s. One African-American
customer stated that the chicken is “excellent, almost
like my mother’s Southern fried chicken!” And white
Americans enjoyed delicacies not offered by competitors,
such as Peach Mango Pie.
The company’s international expansion strategy focused
on markets where management believed it “could
successfully develop the Jollibee brand and put up the
supply chain to support the critical mass of stores in these
selected markets.” In the US, the first state targeted was
California, with plans to expand into Nevada, Hawaii,
and New York in future years. By adopting a franchise
model in the US, Jollibee Foods Corporation (JFC) was
able to draw on local capital and entrepreneurial drive.
In 2001, the firm purchased a majority interest in Tokyo
Teriyaki House, a Japanese restaurant in California,
with the objective of expanding into the Japanese quick
service restaurant (QSR) segment and developing it into
another major chain; it renamed the restaurant Tomi’s
Teriyaki House.
The annual report for 2002 noted that the overseas stores
were providing the company “the experience in the
know-how that we need in gearing up to the realities of
international competition and in reorienting ourselves
to the global environment.”
JFC had identified several markets in Asia for its
expansion activities. In 2004, the company was looking
at the possibility of expanding its three-store network
in Vietnam. Plans for introducing the Chowking brand
in Indonesia were also underway based on the growing
market for Chinese food in that nation. Despite an
earlier, unsuccessful experience operating a now-closed
Jollibee’s store in Xiamen, eastern China, JFC saw huge
potential in the People’s Republic of China. In March
2004, the company signed an agreement to purchase 85%
ownership in the Shanghai-based Yonghe King chain,
Case Studies C24.7
Exhibit 8A Location of JFC group stores by brand, December 31, 2002
Tomi’s
Jollibee Greenwich Chowking Délifrance* TOTAL
Teriyaki**
Philippines
Co-owned 194 110 69 23 – 396
Franchised 242 81 147 5 – 475
Subtotal 436 191 216 28 – 871
Hong Kong 4 – – – – 4
USA 8 – 5 – 2 15
Dubai – – 3 – – 3
Others 9 – – – – 9
TOTAL 1,128 988 902 863 772 739
*JFC was a master franchisee for Délifrance, a French-owned franchise, in the Philippines but not in other countries.
**Initially known as Tokyo Teriyaki House.

Exhibit 8B Location of JFC group stores by brand, September 30, 2004

Jollibee Greenwich Chowking Délifrance* Yonghe King TOTAL

Philippines
Co-owned 190 119 82 23 – 414
Franchised 288 107 194 5 – 594
Subtotal 478 226 276 28 – 1,008
Hong Kong 2 – – – – 2
USA 9 – 8 – – 17
China
Co-owned – – – – 84 84
Franchised – – – – 5 5
Other 12 – – – – 12
TOTAL 501 226 254 30 89 1,128
*JFC was a master franchisee for Délifrance, a French-owned franchise, in the Philippines but not in other countries.

which offered Chinese style fast food in 10 cities. The
number of Yonghe King stores grew from 77 at the end
of 2003 to 89 by the end of the third quarter of 2004 by
which point this brand accounted for 6% of JFC’s system-
wide sales and was more profitable than the domestic
operation which had been hit by rising costs. The strategy
for Yonghe King was to open 20 new stores a year in each
of the next 3 years, increasing to another 50 in the fourth
year and 100 additional stores in the fifth year.
Teriyaki operation in the US. Said Baysa, “Tomi’s Teriyaki
business did not grow according to expectations. Its basic
concept is sound, but there is still much work to be done
to turn it into a strong brand. We are keeping the brand
trademark and the recipes for possible future use. In the
meantime, management is placing its priority on brand
development of Yonghe King in China.” However, he
added that the company expected to open new Jollibee
stores soon in the US.

In May 2004, Ysmael V. Baysa, the company’s chief Summarizing the company’s strategy, the chairman, Tan,
finance officer, announced that during the first quarter noted:
of the year, JFC had opened 21 new stores but closed
There are still major challenges to address to
down 13, of which seven were in foreign operations. It
ensure the long-term soundness of the business
closed all three Chowking stores in Dubai, one Jollibee
— we have to improve our cost structure
store in the US, and shuttered its three-store Tomi’s

C24.8 Case 24 ▪ Jollibee Foods Corporation


particularly in the support groups, we have to
sustain positive growth in same store sales and
we have to win big in foreign operations if we
are to become a truly World Class Business.
PART 6
REFERENCES
Additional sources consulted for this case include:
Jollibee Foods Corporation Website (www.jollibee.com.
ph), Christopher A.Bartlett and Sumantra Ghoshal
(March–April 2001), “Going Global: Lessons from Late
Movers,” Harvard Business Review, Vol. 78, pp. 132–145.

Study Questions

1. Evaluate Jollibee Foods Corporation’s (JFC) performance in the Philippines.

2. In what ways does JFC’s strategy of adding new brands leverage or dilute the strengths of the original
Jollibee concept?
3. What rational and emotional attributes do you look for in a fast food restaurant? Do these attributes
fit your favorite fast food establishment in your country? Conduct a comparative study of rational and
emotional attributes of fast food in your country and identify which attributes are significant.
4. Evaluate JFC’s performance overseas. To what extent can the company transfer its core competency in
its overseas operations? Should it modify its consumer-driven strategies to suit foreign markets, even
if that means Jollibee becomes much less “Philippine” in nature?
5. Should Jollibee continue in its efforts to go international or concentrate on expanding and consolidating
its foothold in the Philippines only? Give reasons to support your answer.

Case Studies C24.9

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